Gold 'Bubble' Seen Turning to Bear Market by SocGen on RecoveryBy Nicholas Larkin
Apr. 03, 2013
1.The Huffington Post Is What Happens When There's No Men In The Room
2.Hungary PM: Clinton is George Soros Puppet, Wants to Overrun EU With Millions of Muslims
3.The Guardian: 'Revolution' Possible in 2043 When Whites Become Minority in U.S.
4.Another Bogus 'Hate Crime': Muslim Teen Killed by "Islamophobe" Actually Killed Himself
5.Austria's Own Trump On Cusp Of Winning Presidency
6.Trump Destroys Hillary in Under 3 Weeks, Now Leading in Two National Polls
7.Rapper Threatens to Kill Donald Trump If His "Momma's Food Stamps" Are Taken Away
8.Trump Takedown of Hillary Confirmed In New Washington Post-ABC Poll
Gold is in a “bubble” after the best annual run in at least nine decades and will head into a so-called bear market as a stronger U.S. economy helps increase interest rates and cut bullion demand, Societe Generale SA said.
Investors are unlikely to raise gold holdings because inflation has remained low, signs that the economy is improving may spur the Federal Reserve to curb stimulus and the dollar has strengthened, the bank said today in a report. Bullion is down 4.6 percent this year after 12 straight annual gains and would need to drop another 4.8 percent to mark the common definition of a bear market.
Prices fell this year as Fed policy makers debated the pace of asset purchases. Billionaire investor George Soros, who called bullion the “ultimate asset bubble” in 2010, cut his stake in the biggest gold exchange-traded product by 55 percent in the fourth quarter. Goldman Sachs Group Inc. said in February that bullion’s cycle has probably turned as the U.S. economy recovers and Credit Suisse Group AG has said the metal is unlikely to return to the 2011 record of $1,921.15 an ounce.
“The gold price is, in our view, in bubble territory,” Societe Generale analysts including London-based Robin Bhar wrote in the report. “Rising interest rates, driven in part by a positive view of the U.S. economy with an associated improvement in the dollar, could be the perfect storm to start a longer-term bear market.”